SAN JOSE, Calif. -- Infinera Corporation (NASDAQ: INFN) today released preliminary financial results for its first quarter ended March 30, 2024. Although presented with numerical specificity, all amounts in this press release are preliminary and based on management’s current expectations as of the date of this press release. These results are subject to all aspects of the final quarterly review process and may change as a result of new information that arises, or new determinations that are made, in this process.

GAAP revenue for the quarter was $306.9 million compared to $453.5 million in the fourth quarter of 2023 and $392.1 million in the first quarter of 2023.

GAAP gross margin for the quarter was 36.0% compared to 38.6% in the fourth quarter of 2023 and 37.5% in the first quarter of 2023. GAAP operating margin for the quarter was (14.0)% compared to 2.5% in the fourth quarter of 2023 and (2.4)% in the first quarter of 2023.

GAAP net loss for the quarter was $(61.4) million, or $(0.27) per diluted share, compared to net income of $12.9 million, or $0.06 per diluted share, in the fourth quarter of 2023, and net loss of $(8.4) million, or $(0.04) per diluted share, in the first quarter of 2023.

Non-GAAP gross margin for the quarter was 36.6% compared to 39.6% in the fourth quarter of 2023 and 38.8% in the first quarter of 2023. Non-GAAP operating margin for the quarter was (8.4)% compared to 7.2% in the fourth quarter of 2023 and 3.5% in the first quarter of 2023.

Non-GAAP net loss for the quarter was $(38.3) million, or $(0.17) per diluted share, compared to non-GAAP net income of $28.6 million, or $0.12 per diluted share, in the fourth quarter of 2023, and non-GAAP net income of $5.7 million, or $0.02 per diluted share, in the first quarter of 2023.

Generated $24.0 million of operating cash flow and free cash flow of $16.0 million for the quarter, and ended the quarter with cash, cash equivalents and restricted cash at $192.2 million.

A further explanation of the use of non-GAAP financial information and a reconciliation of each of the non-GAAP financial measures to the most directly comparable GAAP financial measure can be found at the end of this press release.

Infinera CEO, David Heard said, “Q1 2024 was an important quarter for us marked by significant customer, RFP, and design-win momentum, but also a quarter where the industry was challenged as customers held back spending and pushed out projects. Our bookings were up year-over-year, and met our plan, with the multi-year revenue opportunity associated with our design wins representing potentially the largest in the company’s history. During the quarter, we gained further traction with our new GX line system, won major awards with our ICE-X pluggables, and launched ICE-D, a new line of intra-datacenter solutions with the potential to drive dramatic power reductions, especially for artificial intelligence (AI) workloads.”

“On the operational front, our preliminary expectation is that revenue came in 4% below our outlook range, while all other key financial metrics were within the outlook range. We believe that the first half of the year represents the bottom of a demand cycle for the optical industry, and we expect to see improvements in the back half of the year leading to a very strong demand cycle in 2025. With key industry trends that include the penetration of fiber optics deeper into networks, proliferation of datacenters and AI workloads, and a record number of cables being laid underneath the ocean, we believe optical networking and related technologies have never been more important.”

Financial Outlook

Infinera's outlook for the quarter ending June 29, 2024, is as follows:

Revenue is expected to be $330 million +/- $20 million. GAAP gross margin is expected to be 38.5% +/- 150 bps. Non-GAAP gross margin is expected to be 39.5% +/- 150 bps. GAAP operating expenses are expected to be $162.5 million +/- $1.5 million. Non-GAAP operating expenses are expected to be $139.5 million +/- $1.5 million. GAAP operating margin is expected to be (11.5)% +/- 300 bps. Non-GAAP operating margin is expected to be (3.5)% +/- 300 bps. GAAP net loss per share is expected to be $(0.21) +/- $0.04. Non-GAAP net loss per share is expected to be $(0.09) +/- $0.04.